A measure that I am experimenting with is investment intensity. This is the ratio of Capital Goods ex Aircraft to durable goods orders overall.

As I discussed before a good fraction of investment both residential and non-residential is in structures. However, that’s not what most people mean when they say investment. They are thinking of something more akin to equipment.

The census Bureau’s New Orders for Capital Goods measures that. The Census Bureau also tracks New Orders for Durable Goods generally. This allows us to get a ratio of how much of the manufacturing production in the US is going towards consumption vs. investment.

Of course its not perfect because there are signficant imports of both machinery and consumer goods. Still I think it’s a meaningful proxy.

One of the things its shows us is that production in the US is more business heavy than it was even in the late 1990s.

FRED Graph

Its also interesting, but should be immediately clear why, that the ratio fell during the dot-com burst but rose during the housing bubble burst.